Justin Siegel
Co-Founder and CEO
MocoSpace
As co-founder and CEO at MocoSpace, Justin Siegel has taken the company from the idea phase to a successful business. He spoke with eMarketer about how the mobile social networking space has evolved and where MocoSpace differentiates itself from some of its larger competitors.
eMarketer: Mobile in general, and mobile marketing in particular, have taken some pretty significant steps forward in the past year. In what ways have you seen social networking on mobile devices evolve as part of this process?
Justin Siegel: We’ve seen really two big trends, one good and one not so good, at least from our perspective. The not-so-good trend is that over the past couple of years, the ad rates—the CPMs that advertisers are willing to pay on mobile—have, generally speaking, come down pretty significantly.
On the CPM side of things, in late 2006 through the first half of 2007 it wasn’t that uncommon to see campaigns come on board with CPMs that were well north of $20 and sometimes as high as $40 or $50. Now, granted they weren’t necessarily huge campaigns that were filling 100% of publishers’ inventories, but they were significant in terms of their pricing and in terms of the size of those campaigns. And if you fast-forward to today, you see a very similar story to what’s played out in the online world. The number of campaigns being run on a CPM basis, or at least the percentage, has shrunk, and the CPM rates themselves have come down to level closer to $5 to $10. And that trend looks to be continuing.
“A positive trend that we’ve seen is, generally speaking, a much broader interest and a broader group of advertisers coming into mobile.”
On the flip side, a positive trend that we’ve seen is, generally speaking, a much broader interest and a broader group of advertisers coming into mobile. The first advertisers in mobile—and they continue to play a significant, albeit diminished, role—were other mobile startups and mobile properties and content players. Mobile community sites, ringtone and wallpaper providers, mobile app developers and mobile game companies were pretty significant chunks of the market early on, whereas the brand advertisers, although they were paying a lot, there were not a lot of them. Today, for various reasons, those other startups have a much smaller role in the space in terms of advertising and you see a broader diversity of advertisers.
eMarketer: Do you see different types of behavior between smartphone users and those with feature phones?
Mr. Siegel: The short answer is no, we haven’t really seen that, but I haven’t spent a huge amount of time digging into that. Typically speaking, we’ll look more at the differences between mobile users and Web users, and then distinguish by handset type. On the mobile side of things versus PC, we find that users actually generate more page views and longer session times on their PCs than they do on their mobile devices.
That’s one datapoint, and then the other in terms of smartphone versus feature phone is the performance. Not surprisingly, advertising performance and the value of that inventory is higher for smartphone devices as advertisers want to reach into specific demographics and make the assumption, which I think is more or less accurate, that smartphone users are probably valuable. A lot of companies now are building out either iPhone apps or iPhone-friendly sites, so when they run an ad now they have a place to direct these users. But many of them still don’t have WAP sites or applications compatible with feature phones, meaning there’s just no place to effectively send those users.
eMarketer: How do you find the level of marketer awareness about advertising on a mobile social network?
Mr. Siegel: I would say, generally speaking, that awareness at the highest level is significant. I think everybody’s aware that you can advertise on mobile and they’re aware that at some point this will be a significant opportunity for them. But I think today the reality is that most do not see mobile as a high priority.
eMarketer: Do you have a sense of how metrics compare on the PC Web versus on mobile?
“I think if you took the same creative and put it across all of the properties in the same basic placement, I think in terms of performance it would go smartphone, feature phone, Web.”
Mr. Siegel: Generally speaking, the performance on mobile is higher, and specifically on the smartphone it is the highest, but it’s hard to make a pure comparison for a number of reasons, not least of which is that the creatives are all different across the different platforms and the ad placements are different. But I think if you took the same creative and put it across all of the properties in the same basic placement, I think in terms of performance it would go smartphone, feature phone, Web. But I guess when I say performance that means the click-throughs would take shape in that order. How the brand is measuring the ROI is a whole other question. They might get a lot more click-throughs on the iPhone, but maybe more sales through their Web ads. A lot depends on what the end-game performance is from the marketer’s perspective.
The full version of this interview is available here, to eMarketer Total Access subscribers only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs.
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